Cobalt has a vital role to play in the world’s energy transition and electrification.

Jeremy Weir, Executive Chairman and CEO, Trafigura Group

 

 

 

 

 

 

Our agreement with Entreprise Générale du Cobalt

Entreprise Générale du Cobalt (EGC) was established in response to two decrees issued in November 2019 by the Democratic Republic of the Congo’s (DRC) Prime Minister and Minister of Mines.

EGC’s role is to purchase, process and sell cobalt produced by artisanal miners or companies involved in artisanal and small-scale mining (ASM) in the DRC. On October 27th, 2020 Trafigura entered into an offtake agreement with EGC for cobalt. A component of the agreement included support by Trafigura to EGC and its partners for the development of controls and traceability associated with ASM cobalt production.

As part of Trafigura’s original pitch to EGC, the company presented its experience in establishing the Mutoshi Pilot Project in close collaboration with the NGO Pact, amongst other experts.

Pact is an international NGO with a long history of operating in the DRC. Amongst other areas, Pact specialises in health and safety in mining, human rights, traceability, economic empowerment among miners, child labour reduction, mineral certification and ethical sourcing.

EGC, Pact and Trafigura are aligned in the belief that supporting the DRC State in formalising the ASM cobalt sector represents a game changing opportunity for the country and for the wider cobalt industry.

 

 

 

 

 

Watch How Trafigura's engagement with EGC will work with French, Chinese, Korean or Japanese subtitles.

How our agreement with Pact supports our work with Entreprise Générale du Cobalt

In January 2018, Trafigura first signed a strategic agreement with the internationally respected NGO, PACT. PACT has extensive experience of working with artisanal miners in challenging environments. Pact is a sector leader in the practical implementation of responsible ASM sourcing.  Trafigura first leveraged PACT’s expertise at the Mutoshi Pilot Project.  Latterly, Trafigura contracted Pact to support its work with EGC.

For the EGC project, Pact is responsible for a variety of tasks including widespread training, the monitoring of EGC’s implementation of the ‘EGC Responsible Sourcing Standard’ at a site level, the development and support of robust stakeholder engagement forums; and supporting continuous improvement of conditions for miners, ASM Cooperatives, Government agencies and other impacted and engaged stakeholders.

 

 

Questions of note

What is EGC?

Entreprise Générale du Cobalt (“EGC”), a subsidiary of the Democratic Republic of the Congo’s (DRC) state owned mining enterprise, Gécamines, was established in November 2019 in response to two decrees issued by the DRC Prime Minister, Sylvestre Ilunga Ilunkamba, and Minister of Mines, Willy Kitobo Samsoni. 

The decrees (19/15 & 19/16) were designed to safeguard artisanal mining activities associated with defined strategic minerals, such as cobalt and, secondly, to carry out the creation, organisation and functioning of a regulatory authority for the control of such strategic mineral markets.

What skills do Trafigura bring to this commercial relationship?

Trafigura first piloted an approach to the formalisation of ASM at the Mutoshi Concession back in 2018.  The results that were achieved were documented in a socio-economic impact assessment (click here).  Results included as follows:

  • Working conditions were remarkably improved;
  • Freely accessible health care services improved the health of participants;
  • A marked (positive) impact on the local economy, including the creation of new businesses in response to higher demand for goods and services;
  • For every 1,000 miners at the site, the local economic impact was approx. US$1 million per year.
  • Female miners participating in the project earnt about two and a half times more than their counterparts working in mines outside the project site.

The Mutoshi project benefitted from strong support from the DRC authorities and many expert partners.  The lessons that we have learned, and the partnerships that we forged, will be critically important as we look to the future. 


“During my visit to Mutoshi Cobalt, I was happy to see a well-organized ASM cooperative with about 5,000 diggers. It is an encouraging organizational model and I think that I will continue to support these types of initiatives that give work to the Congolese people at a safe site after removing waste rock. Good luck and may God bless you for the good work you’ve done.”
Excellence Willy Kitobo Samsoni – Minister of Mines (National)

“May God who has provided us with these mineral riches, support Mutoshi. In the hope that he gives the cooperative the intelligence and wisdom to work well with a spirit of performance as Mutoshi Cobalt is making the DRC proud, specifically, and central Africa in general.”
Excellence Alpha Denise Lupetu Tshilumba – Vice Minister of Mines (National)

“COMIAKOL is a good example of the reform of the ASM sector. I just discovered it and want to use it as reference for the process of making artisanal exploitation zones (ZEAs) more viable.”
Excellence Jean Marie Tshizainja – Minister of Mines (Provincial)

“Thank you for the welcome and for the explanations. There is a transparency to your operations and that is a fundamental element of professionalism of practice. Congratulations.”
Excellence Norbert Mbangu Mwangal – Minister of Infrastructure (Provincial)

What skills do Pact bring to this commercial relationship?

Pact is an international NGO with a long history of operating in the DRC. Pact’s ‘Mines to Markets’ programme (M2M) currently operates in more than a dozen countries in Africa, Asia and South America.

Pact specializes in health and safety in mining, human rights, traceability and transparency, economic empowerment among miners, child labour reduction, mineral certification and ethical sourcing.

Pact also focusses on improving governance: strengthening local, regional and national institutions.

Click here to learn more about Pact’s experience.

How will Trafigura and Pact work with EGC?

Trafigura is committed to working with EGC and other authoritative stakeholders within the DRC, and further afield in formalising the ASM cobalt sector. 

Given the scale of the task, our shared goal is to work pragmatically and iteratively. 

We recognise the importance of collaborative project design and implementation with EGC, their partners as well as relevant DRC Government agencies, amongst others.

Ultimately, we believe that the legitimacy of our efforts will depend on broad-based consultation and involvement.  EGC, Trafigura and Pact are aligned in the objective to hold a series of consultations with Provincial and National Government agencies, ASM cooperatives and other project members with a view to co-designing future implementation plans.

At Trafigura we are guided by the intention to be transparent and open in the challenges and opportunities that we face over the course of this programme.

What is the role of the Technical Committee?

The Technical Committee will coordinate the sharing of information between members and the monitoring of technical aspects of the project.  Such aspects may include:

  • The identification and approval of artisanal zones or ‘ZEAs’;
  • A review of mine plans, including plans for the deployment of mining contractors to maintain designated ZEAs;
  • The maintenance plans for selected ZEAs;
  • The assessment of service providers;
  • The monitoring of mining activities as well as the bagging, labelling and registration of ore in accordance with supply chain controls;
  • The implementation of blockchain requirements;
  • The monitoring of the establishment and maintenance of Purchasing Stations;
  • The assessment of any treatment plants / treatment plant operators, in order to ensure safe and secure operations;
  • The monitoring of occupational health and safety at all operations with the objective of achieving zero harm;
  • The monitoring of compliance with environmental standards;
  • The monitoring social impacts and socio-economic development within and outside of ZEAs;
  • The review of operational costs associated with ZEAs, Purchasing Stations and transportation;
  • The monitoring of activities associated with due diligence against Buyer's responsible sourcing expectations, traceability, data review and reporting requirements.
What interventions could be introduced through the Technical Committee?

Trafigura is committed to promoting a safe, respectful and legally robust working environment for the DRC’s ASM cobalt sector.  Our intention is to work with EGC, Pact and authoritative stakeholders through the EGC Technical Committee to ensure that straightforward requirements are met from the outset.

Over the course of developing the Mutoshi Pilot Project, we established a number of key expectations, highlighted below, for working responsibly in the ASM context.  We believe that these expectations can be applied directly to the context of this project.

  • Careful diligence of cooperative management structure, hierarchy, roles, relationships and responsibilities;
  • Registration of all cooperative staff on site, including verification that they are over 18 years old;
  • Ensuring respect for national and international laws and norms regarding anti-bribery, corruption and money laundering as well as respect for labour and human rights;
  • Training and technical assistance on safe and productive working practices, as well as on legal rights and obligations;
  • Constant identification, development of controls, reporting and investigation of social and environmental risks;
  • Co-creation of mine development and management plans;
  • The mandatory mechanized removal of overburden/waste to ensure safe working conditions and efficiency
  • Training of security forces to respect human rights of employees and the local community;
  • The establishment of operational and community-level grievance mechanisms;
  • Transparent and timely reporting of pricing including clarity on the price determination mechanism (e.g. prices paid by lot, by grade, etc.).

Our goal is to support incremental but substantial improvements at cobalt production sites.  Our recommendation is that the project targets a small number of concessions initially with a view to gradually building the project out in scale.

Where should I go if I want to know more about this project, or if I wanted to raise a grievance?

Should you wish to receive updates about this project, please sign up here

If you would like to contact Trafigura about this project we request that you contact us directly by clicking here

If you have a grievance related to this project, or indeed wish to share a sense of wrong linked to Trafigura’s operations or activities, we ask that you contact us via Trafigura’s independently managed ‘grievance hotline’ (click here). 

 

 

 

 

 

 

 

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